South African business insolvencies are expected to stabilise in 2026 before increasing modestly in 2027, within a global environment in which the Middle East conflict is affecting energy markets, inflation, financial conditions, and business confidence, according to Allianz Trade’s latest Insolvency Report.
The trade credit insurer forecasts local insolvencies will move from 1 534 cases in 2025 to 1 540 in 2026 and 1 590 in 2027, reflecting a stabilisation after several years of decline. Insolvencies fell from 1 657 cases in 2023 to 1 551 in 2024 and then 1 534 in 2025.
Allianz also noted that 2025 insolvency levels were about 18% below the country’s 10-year average and roughly 40% below the 20-year average, placing South Africa among the countries with relatively low insolvency levels compared with historical benchmarks.
“While South Africa has benefited from a multi-year decline in business insolvencies, the environment is clearly becoming more fragile,” said Allianz Trade South Africa country manager Luke Morawitz.
“Global geopolitical tensions, particularly in the Middle East, are reversing some of the tailwinds that supported local businesses in recent years.”
South Africa was also among a minority of countries that remained below both pre-pandemic and Global Financial Crisis insolvency benchmarks in 2025.
The report identifies several global pressures affecting corporate insolvencies, including:
- higher energy and logistics costs;
- supply-chain disruption;
- weaker business confidence; and
- tighter financial conditions.
Globally, Allianz expects business insolvencies to rise by 6% in 2026, after also increasing by 6% in 2025, marking a fifth consecutive year of increases. The insurer says any stabilisation in insolvency levels has now been delayed until 2027 because of spillovers from the Middle East conflict.
According to Allianz, the conflict is increasing pressure on energy-intensive sectors such as transportation, chemicals, and metals, while also affecting global value chains through higher shipping and input costs.
“This situation is driving up costs across global value chains, from agrifood to manufacturing, healthcare and technology,” said Allianz Trade’s chief executive, Aylin Somersan Coqui.
“The combination of weaker demand, rising input costs, and tighter financial conditions is straining companies with weak pricing power, thin margins, high debt levels, or structurally higher working capital requirements.”
The insurer estimates the Middle East conflict will contribute about 15 000 additional insolvency cases globally over 2026 and 2027.
Asia and Western Europe remain major contributors
Asia is expected to remain the largest contributor to rising insolvencies, led by China, where Allianz forecasts insolvencies will rise by 9% in 2026 and another 5% in 2027 amid ongoing structural weakness in property and consumer demand.
Western Europe is also expected to remain under pressure because of exposure to imported energy and vulnerable sectors such as chemicals, transportation, construction, and metals. Allianz forecasts Western European insolvencies will rise by another 3% in 2026 before easing slightly in 2027.
Globally, Allianz estimates 2.2 million jobs could be directly at risk from insolvencies in 2026, with construction, retail, and services among the sectors facing the greatest strain.
The report also warns of further downside risks, including a prolonged disruption to oil and gas flows through the Strait of Hormuz, sovereign debt stress, and a potential correction in AI-driven investment markets, which Allianz says could increase insolvencies further in the United States and Western Europe.
